China is importing record volumes of coal, with purchases from Australia and Russia at multi-year highs, as Chinese authorities focus on boosting energy security and the economy amid the worsening quality of the domestically mined coal.
China is mining record amounts of coal, but the quality of the fuel for burning for electricity and for steelmaking is lower than imports, so the world’s top coal consumer is boosting imports from Australia and Russia, according to Chinese customs data reported by Bloomberg.
Early this year, China received the first shipment of Australian coal in two years as Beijing signaled it was warming up to restoring trade relations with its former major supplier of the fossil fuel.
Since then, Chinese imports of coal from Australia have soared, and so have imports from Russia, whose coal has been banned in the West for more than a year now.
As a result, Russia and Australia are gaining market share in China at the expense of Indonesia, analysts say.
Chinese coal imports jumped in August by 12.9% from July to a record in data going back to 2015. Imports also surged by 53% from August last year, according to China’s customs data.
With a significant decline in power output from China’s massive hydropower sector due to insufficient rainfall and drought, coal production, coal imports, and coal-fired electricity generation have jumped this year.
China is relying on coal to avoid blackouts as the economy reopened after the Covid lockdowns. During the first half of this year, coal production, coal imports, and coal-fired electricity generation surged and offset a significant decline in power output at China’s massive hydropower capacity due to insufficient rainfall and drought.
Lower international coal prices compared to last year’s record highs, when Russian coal was banned in the West, have also played a role in the Chinese surge in imports this year.
By Tsvetana Paraskova for Oilprice.com
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